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Statements from Social Security

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POSTED February 7, 2014 9:49 p.m.

Q: I used to get a letter from Social Security every year that told me how much I had paid into the system and gave me estimates of my future Social Security benefits. But I swear I haven’t received one in years. Yet I have a neighbor who told me he got his letter a couple months ago. How do I get back on the list to get an annual benefit update from Social Security?

A: You get back on the list by turning 60. So I’m guessing you are under that age, while your neighbor is over 60 and not yet getting Social Security benefits. The history of that annual Social Security statement is interesting. Here is the story.

Back when I started working for the Social Security Administration in the early 1970s, there was no easy way to find out what your future Social Security benefits might be. Of course, this was before the computer revolution really took hold, so there was no easy way to do a lot of things that are now just a mouse-click away.

Anyway, back in those “dark ages,” SSA offered a service that allowed folks to request a statement of their earnings as posted to Social Security records. (Because your Social Security benefit is based on your earnings, it obviously is important that you make sure your records are up-to-date and accurate.) SSA encouraged people to check their earnings files at least once every two or three years. Frankly, very few folks did that. But those who did were given a little post card-sized form to fill out. That form went to a Social Security record storage facility in Wilkes-Barre, Pa. Perhaps a month or two later, the requestor would get a statement in the mail that provided a year-by-year breakdown of his or her earnings as shown in Social Security records. People were told to review the statement, and if they noticed any errors, to report them to their local Social Security office.

What people didn’t know is that if you wrote the words “Benefit Estimate Request” on the post card, the agency would also send them a letter with estimates of future retirement benefits. SSA employees knew about this service, and would tell folks about it if they asked, but it wasn’t really advertised to the general public. At the time, the agency didn’t think it had the resources to be routinely providing benefit estimates to all Americans.

But as computers became more commonplace, and as it became easier to access information stored in Social Security’s large data banks, SSA leadership pushed to have benefit estimates more readily available to the American public. At first, and I believe this was sometime in the early 1990s, the information was only available upon request. But at least the service was heavily advertised.

However, eventually SSA got the permission from Congress to begin sending out statements automatically to every man and woman in the country who was over age 25. The service was initially controversial, primarily because of the costs. I no longer remember the actual numbers, but I believe each statement cost the government about 50 cents to prepare and mail. So you multiply that by more than one hundred million statements sent each year, and you are talking about, as former Senator Everett Dirksen once said when referring to government expenditures, “real money.”

But that initial controversy soon died down when people began to realize the benefits of the service. Most Americans really appreciated getting the statement. It was considered to be a very valuable financial planning tool.

But then in the 2000s, a more conservative approach to government operations took over the country. All government agencies were told to look for ways to trim their budgets. At SSA, the annual Social Security statement came under the ax. It initially was discontinued all together. But at the same time, SSA made the statement available online, as it still is today. You can go to www.socialsecurity.gov and click on “Online Services” and you will find a link to obtaining a statement of your earnings and an estimate of future benefits.

More recently, the Social Security agency decided to once again start sending out annual paper statements, but only to folks over age 60 who are not yet receiving Social Security benefits. It was felt that these folks really could use the information as they approached their retirement years.

And a short while back, SSA announced that it would also send a paper statement to folks on their 25th birthday. This is an age when most young people are settling into a career. Social Security is probably one of the last things on their minds, and yet, most of these people are seeing Social Security (and Medicare) deductions coming out of their paychecks. My guess is that by sending them a statement of earnings and future benefits, the government just wants give them a glimpse of the bigger picture.

Here is one other little note for people over 60 (and not yet getting Social Security benefits) who should be receiving a statement each year in the mail. If you aren’t getting one, the problem may be with your taxes. For you see, SSA doesn’t keep mailing addresses for Americans until they start getting Social Security benefits. So SSA gets a mailing list each year from IRS, the only government agency who really knows where you live. If IRS has the wrong address for you, then SSA will have the wrong address, too.


 

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